While new or younger teachers are being issued RIF notices, growing numbers of veteran CTA members throughout the state are being offered early retirement incentives as districts seek to reduce payroll costs, says Steve DePue, CTA staff retirement consultant, who has answers for the widely asked questions below.
What kinds of early retirements packages are certificated employees being offered?
Offers range from $500 to $30,000 in cash allotments to the CalSTRS Golden Handshake — Ed Code 22714 — with two years of service credit as a flat offer for those who retire early. Other school districts are contracting with private companies that offer many different options, including plans that pay out in five years, plans that pay out lifetime survivor benefits, or cash offers. Early retirement offers are being made by some districts to employees who are at least 55 years of age or veteran teachers slightly younger with 30 years of service.
I'd like to retire, but I'm feeling nervous. What is the best course of action?
It's normal to feel apprehensive in these uncertain economic times and tough to know whether your future will be best if you keep a secure job or accept an early retirement offer. Don't be pressured into giving an immediate answer. Be sure you are ready and prepared to retire and have a plan.
The decision to accept such an offer can be a huge step for certificated employees and should not be made in haste. It may seem too good to pass up, but it's best to meet with a CalSTRS retirement counselor or another adviser before deciding whether you will have enough money to last the rest of your lifetime. As a general rule, for every year you work, the better your retirement benefits will be — so do the math first. Visit www.calstrs.com for a very helpful retirement benefit calculator, as well as a wealth of information about your CalSTRS defined benefit.
How do I know if I'm ready?
Teachers give so much of themselves to their profession that retirement can sometimes feel like a loss of identity. Or you may feel like you have gone from 100 miles an hour into the slow lane. Do you have a sense of how you will be spending your time in a fulfilling way? Are you psychologically ready? Are you concerned that your school may be left devoid of mentors or experienced teachers? These are things to consider before accepting or rejecting an early retirement offer.
Can I accept a teaching job elsewhere or sub if I take early retirement?
Keep in mind that you won't be able to work in your district of retirement for five years if you receive the CalSTRS Golden Handshake, but you can accept a teaching job in another district. Subbing in your former district (without a CalSTRS Golden Handshake) or in other districts is fine with an earnings limitation of about $27,900 per year before penalties set in from CalSTRS. If you stay out of creditable CalSTRS employment for 12 months, there is no earnings limitation.